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An update on the Nelson rental property market
What tenants should expect when moving to this coastal town.
Last updated: 29 April 2024
If you’ve ever visited this delightful coastal city of Nelson in the upper South Island, chances are you’d love to spend a decent period of time there, it’s on your bucket list. With its warm sea waters, plentiful sunshine, pretty town centre, art community, wineries and markets, there’s a lot to love.
Locals like Bayleys agent, Rob Vining would quite like to keep the delights of this place a secret, but it’s a forlorn hope. A lot of people want to live there, and, in the current market, demand for good rental properties outstrips the supply, so those intent on finding a property will have to be determined.
At the time of writing there are 89 rental listings in Nelson on Trade Me Property and property management agents say this is not enough, the norm is more like 150 to 200.
The majority of people are staying put in their rental properties this year as opposed to moving on at the end of their lease, explains Juliet Robinson, franchise owner of property management firm, Quinovic Nelson.
“They’d often go to bigger, better rentals with more facilities, but not this year,” she says. Budgets are tighter and there are fewer homes to move to. So the competition is tough.
But to those coming from larger cities the rents still seem pretty affordable. For $700 a week you’ll get a very nice three bedroom, two bathroom home in Atawhai with sea views at the moment. This is more than you would generally pay for a home of this size in Nelson, but it’s a particularly nice one.
Normally, in Nelson and Richmond, you’ll pay $600 to $650 a week for a three bedroom home, $500 a week for a two bedroom property and $400 a week for a one bedroom unit, says Rob Vining. In effect, it’s another $100 a week per bedroom, and that’s across Nelson city, nearby Stoke, Richmond and Atawhai.
On average, rents in Nelson have gone up between 8.5% and 10% in the last year or so, says Juliet.
What’s wonderful about Nelson rental properties is that they vary hugely, from cute historic cottages in Nelson city centre to cliff top homes in Britannia Heights to newer family homes in Stoke or Richmond.
Nelson differs from other rental markets in that it has a supply of furnished rental properties.
The furnished homes market is quite strong in Nelson partly because people might Airbnb a home with furnishings over summer at peak holiday home rates. Then Quinovic takes it for the rest of the year, explains Juliet. Tenants come in on the understanding that the home is only available for eight or nine months on a fixed term tenancy before going on the summer market in December.
Justine Vavasour, a property manager from Inspire Real Estate New Zealand, has a furnished one bedroom apartment for rent at the moment in a large Mediterranean style Tāhunanui complex, whose apartments are popular holiday rentals. Priced at $430 a week, it’s a slightly higher rent because it’s furnished.
Nelson is a popular place to come and have a prolonged holiday in the so-called winter months. “It’s always sunny,” says Justine, a former Wellingtonian.
440 Atawhai Drive, Atawhai, Nelson
Most sought-after Nelson rental locations
Agents agree, the most popular place to rent and live is Nelson central, but nearby, The Wood, Atawhai, Tāhunanui and Stoke, all still part of Nelson, are close behind. Neighbouring town, Richmond, is also becoming increasingly popular with new homes, new medical centres, schools being built, and a bustling town centre. Stoke, a suburb of Nelson, also has great facilities and some more modern homes in a subdivision built in the 1990s, says Juliet.
Richmond and Stoke are popular with families, as both have good schools and they’re close to Saxton Field, a 65 hectare sports facility halfway between Nelson and Richmond.
There’s no compromise on schools in Nelson, whether it’s Nelson Girls and Nelson Boys, Nayland College in Stoke and Waimea College in Richmond.
Nelson has a lot of private landlords managing their rentals
Noticeably, Nelson has more than the usual amount of rental properties advertised by private landlords. They own a significant asset and are looking to save money in the cost of living crisis by managing the property themselves, explains Juliet.
One property owner we spoke to says she has rented her property out for the past 15 years and knows what she’s doing. She’d rather manage tenants than property managers, she says. And she tends to rent slightly under the market rate, so she has loyal tenants who stay, she adds.
New homes coming onstream to for tenants
Nelson’s rental property market also has a good supply of newly built homes becoming available for rent at the moment. Quinovic’s Juliet Robinson says she’s working with house companies including G.J. Gardner Homes and Jennian Homes among others, who have built new homes speculatively in fast-growing parts of the Nelson area. Not all of them have sold in the quieter sales market, so they’re looking to generate income from them for a period.
Both Richmond and Atawhai have some big new developments, says Juliet. There’s The Meadows subdivision in Richmond West, Nelson which is a brand new suburb with homes being released in stages and over 1500 homes already built.
A brand new three bedroom home in Richmond will rent out in the high $600s, early $700s per week, says Juliet.
They’re very appealing because no one’s lived in them before, she says. And sub divisions like The Meadows have access to excellent amenities in Richmond, a ten minute walk away.
These new homes suit Quinovic’s database of professionals, project managers and IT executives who come to work in Nelson for six months at a time. The property manager offers these corporate clients homes that are furnished if needed.
187A Quebec Road, Washington Valley, Nelson
Who’s moving to Nelson and looking to rent?
So who’s moving to Nelson? A lot of people are relocating from main urban areas, they’ve been coming since Covid, says Juliet. A lot of people are coming from larger cities in the North Island, at the higher end of the rental market. They’re finding work opportunities in Nelson or buying businesses in the city, says the property manager.
Others renting in Nelson are working remotely. “A lot are in the IT industry and don’t need to be domiciled in the country they’re working. One IT worker is helping run the New York city subway from Nelson,” says Juliet.
Some of her tenants are renting for a year or two before they buy in the city.
How can people compete for a rental? Good references, first and foremost, says the Quinovic franchise owner. For people who’ve sold their homes to come and rent in Nelson, and who don’t have tenancy references, Juliet has a solution. She suggests they get references from their selling agent who can tell property managers how well they presented their property for sale.
Bayleys’ Rob Vining says he’s got an extensive database of prospective tenants already. He’s just heard from a professional couple in Wairarapa who have asked him to find them something in Nelson. He’s also in touch with people from Auckland, “because people have had enough of Auckland”, he says, and he always has inquiries from Christchurch. There is a lot of international interest too.
It used to be that rental enquiries went up and down at certain times of the year, for instance, in August and September it would go down, in December and January it would be flat out. Now there’s no rhyme nor reason, the rental demand is there all year round, Rob says.
They come for all sorts of reasons, for most it’s work, he says. “It's the three F’s, Fishing, Farming and Forestry.” The city has three big fishery companies, Talleys, Sanford and Sealord. Then there’s the tourism industry with Abel Tasmin and Marlborough Sounds on the doorstep. The Nelson area also employs many in the wine industry and the brewing sector. “Hop growing is “going mad” again,” says the Bayleys agent.
The Nelson sales market could mean more rentals to come on
With a dearth of rental properties in the current market, what are investors doing at the moment? Are they buying more properties to help supply the Nelson rental market?
Nelson is seeing more investors, says Chris Leighton from Tall Poppy, in anticipation of the coalition Government changing the brightline test from 10 years to two years in July. With interest rates pulling back and anticipated to continue, this will help new investors coming in, she believes.
Nelson remains a popular property market to buy in and prices have corrected, with the market for higher end homes slowing, says the Tall Poppy agent. People are moving to Nelson from Auckland, Queenstown and Wellington among other places.
“There are plenty of buyers, it’s just getting them committed,” says Chris.
A home that has an area or apartment they can get income from holds more allure for buyers, she adds.
The popular homes are those within walking distance of town. In The Wood area of Nelson, she has a two bedroom unit on Elliot Street which would make a great investment property, easily rented to long stay and short term holiday makers.
Rob says he’s dealing with quite a few expat Kiwi buyers. He’s sold a home in Atawhai recently and the people aren’t coming back for 12 months, so he’s offered to rent it out for them.
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